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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Sustainability
February 19, 2013 at 11:21 AM

Seattle’s downtown boom

Seattle has more residential units under construction downtown than any other U.S. metropolitan area other than Houston. This includes 6,000 apartments, one-third of all under construction in the Puget Sound region. Population is growing faster than the city as a whole, increasing 24 percent since 2000 vs. 10 percent for the city. Downtown also enjoyed the strongest improvement among employment centers in the region with a 7 percent year-over-year increase in jobs. These are among the findings presented at last week’s 2013 State of Downtown Economic Forum of the Downtown Seattle Association.

“We’re moving in the right direction, but we must continue to develop an environment which attracts and nurtures this growth,” said association President and CEO Kate Joncas. “We need to ensure that downtown is family friendly, which includes developing a downtown public school and rezoning South Lake Union to support the kind of density that will attract families… We have an obligation to ensure that we’re taking a smart approach to our advantages over suburban areas – steps like improving the pedestrian experience, preserving transit and making downtown Seattle the region’s preferred destination to live, work, shop and play.  These are top priorities.”

A prime mover of the activity is, which, along with Paul Allen’s Vulcan Real Estate, has created a trend-setting urban headquarters campus in South Lake Union and is set to build the first of three skyscrapers in the Denny Triangle. But corporate and developer interest goes deeper. For example, R.C. Hedreen is preparing a massive two-tower project on the site of the Greyhound bus station. The downturn-delayed Fifth and Columbia Tower is on again; it would be the tallest building erected here in 20 years. One wonders if the city is adequately protecting the views of the iconic Space Needle.


Comments | More in Sustainability, Urban issues | Topics: Downtown Seattle Association, R.C. Hedreen, Vulcan

October 3, 2011 at 10:00 AM

The real Solyndra problem

As you know, the California solar energy company Solyndra received a $525 million loan from the U.S. Department of Energy, made some bad bets about the direction of raw materials prices and technology, forcing it to file for bankruptcy protection. This has produced a House investigation, with Solyndra executives taking the Fifth. If they were investment bankers, this would be another day at the office, but never mind that.

To the critics that say the Obama administration’s effort to seed a renewable energy sector with $22 billion in loan guarantees, former Reagan administration trade and commerce official Clyde Prestowitz says:

These are precisely the wrong conclusions to be drawn from the episode. As a former director of new product development at Scott Paper Company, I can tell you that any corporation or venture capitalist would be happy if as many as one in ten investments in new products and ventures paid off. The Solyndra loan guarantee of $535 million represents only about 2 percent of the Energy Department’s $40 billion portfolio of loan guarantees whose recipients mostly seem to be doing pretty well. Indeed, the number of jobs in the U.S. solar industry has doubled to 100,000 since 2003.


Comments | More in Energy, Great reset, Infrastructure, Oil prices, Sustainability, Transportation

July 15, 2011 at 10:20 AM

Looking beyond downtown Seattle, ‘free’ parking isn’t really free

Downtown Seattle has the dubious distinction of having the sixth costliest garage parking among cities in the United States, according to reporting by the Seattle Times’ Susan Gilmore. It’s a competitive issue to be taken seriously, especially if it hurts downtown businesses. On the other hand, garages charge what the market will bear and Seattle has a dense downtown with plenty of attractions and assets. (And one doesn’t have to own a car here).

But even “free” out in the suburbs isn’t really free. The externalities, such as environmental damage and climate-altering emissions, of big surface parking lots, wide streets, extensive car use, etc. aren’t priced in to conventional studies or public policies. Much of this is an artifact of a moment in history when energy was very cheap and debt low. Not for nothing are many suburbs suffering worse from the recession and its aftermath than center cities.

Beyond that, “free” parking, is heavily subsidized, although these costs are largely hidden from drivers. Donald Shoup, professor of urban planning at UCLA, analyzes the costs and consequences of this in his book, The High Cost of Free Parking. Tyler Cohen has written about it for the New York Times.


Comments | More in Downtown and urban issues, Energy, Oil prices, Sustainability

March 3, 2011 at 10:20 AM

Don’t be railroaded into myths about trains and transit: They’re essential to the future

Ridership may go up and down for Sound Transit, but it is essential infrastructure for a prosperous Northwest in the decades to come, particularly commuter rail and light rail. Gasoline prices are only going to head higher in the long run, electric cars will be expensive and are not a power source, so offering the choice of a robust multi-modal transit system is essential for competitiveness.

Some conservatives make a fetish out of opposition to transit and trains, for reasons that elude me (anti-urban bias, money from the oil companies, ???). A host of myths are thrown out about rail. In reality, no transportation system in the world exists without public subsidies, and America heavily subsidizes the automobile and airlines to the detriment of what was once the world’s finest rail system. Roads and freeways do not “pay for themselves.” Also, Amtrak is very highly patronized and would be more so if schedules were more frequent and convenient. The success of the Cascades here shows this, as does the relatively abundant rail service in California. As for light rail, one of the most successful systems is in road warrior Dallas, which just opened a 28-mile extension.

Now China and other nations are rapidly catching up with Europe and Japan in high-speed rail, and Europe is expanding its systems. High-speed rail offers faster service and more energy efficiency on numerous city-pair routes. They understand the need for rail in the mix to save fuel and address climate change. In America, we’re fighting over just creating higher-speed rail. In fact, almost a century ago 100-mile-per-hour trains were common here. Now Amtrak is often limited to 79 mph outside the Northeast Corridor. And even the Northwest Corridor is not true high-speed rail, from 120 mph to more than 220 mph. (We need to expand freight capacity, too — something Wall Street has resisted, not wanting private railroads to reinvest in themselves).


Comments | More in Energy, Railroads, Sustainability, Transportation

December 14, 2010 at 9:50 AM

Lessons from Weyerhaeuser and the decline of the U.S. economy

If you want a snapshot into today’s American economy and its inability to create productive jobs, look no further than Weyerhauser. The iconic Northwest company was once one of the largest integrated timber and paper companies in the world. It made things. It was the jobs engine for thousands in small mill towns in the Northwest, as well as at its headquarters in Tacoma, and later, Federal Way.

Now it’s preparing to convert to a Real Estate Investment Trust, where most of its profits will go directly to investors. On Monday, it announced a tripling of its dividend ahead of the conversion. Today’s Weyerhaeuser is essentially a large owner of timberland, most of its productive manufacturing operations shut or sold off.

This transformation may be very profitable for investors. (Maybe not, considering how much of the profit base depends on a housing market that may be sick for many years to come; the REIT idea was hatched during the real-estate bubble). For new jobs, productive activity and exports, not so much. The company employed 37,900 in 2007 — the number of jobs had dropped to 14,900 by 2009. In 2008, Weyerhauser eliminated 1,500 well-paid white-collar jobs, most at its headquarters. The damage reached from scores of small towns to metro Seattle.


Comments | More in Jobs/Unemployment, Natural resources, Sustainability, Trade, Weyerhaeuser

July 6, 2010 at 10:15 AM

Beach reading about the great meltdown and the way forward

A reader asked, what are the best books that can help us understand how we got into this economic mess — and maybe how we can get out. Here’s my short list (and as part of getting out of the Great Recession, I urge you to buy them at your local bookshop):

In Fed We Trust: Ben Bernanke’s War on the Great Panic, by David Wessel. This is a fascinating account of the decisions made by the Fed chairman, then New York Fed President Tim Geithner and then Treasury Secretary Hank Paulson during the worst of the fall of 2008. Bernanke’s biggest goal was to avoid the mistakes of the Depression-era Federal Reserve. In doing so, however, did he undermine democracy?

Freefall: America, Free Markets and the Sinking of the World Economy, by Joseph Stiglitz. The Nobel laureate economist looks at the roots of the collapse in market failure, perverse incentives, ideological blindness and careless deregulation. None of these problems have been corrected by the Obama administration.


Comments | More in Bailout, Banking, Federal Reserve, Great Recession, Outlook, Sustainability

June 18, 2010 at 10:00 AM

America and big oil: We wish we knew how to quit you

On Tuesday, President Obama told the nation, “the tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.” Today he’s in Columbus touting federal stimulus money going to…a road project.

Last year alone, the stim put more than $100 billion into highways and the auto industry. This as transit systems around the nation were suffering and cutting service, Amtrak remained a hostage to politics, and high-speed rail continued to be a dream to study — even as our competitors already have it and are building more. It’s been shown that road projects don’t ease unemployment. It’s not even true that “roads pay for themselves,” even without factoring in the unfunded externalities such as the cost of sprawl, pollution and environmental damage.

Most of all, the massive new highway projects planned around the country continue our dependence on fossil fuels — with major changes in ways to power most cars years away if ever — and deprive Americans of transportation choices.


Comments | More in Environment, Sustainability, Transportation, Urban issues

April 9, 2010 at 9:45 AM

McGinn is on the right track with light rail; the housing delusion continues

Seattle Mayor Mike McGinn is right to make the case for redesigning the 520 replacement bridge to include light rail. The world faces a future of higher energy costs, whether Americans want this or not. It doesn’t really matter what we want. We can want a pony. But the energy future is coming no matter how much we drill, baby. Electric cars? Maybe, but they’ll still be more expensive and require plenty of fossil-fuel “inputs.”

As a result, the metros that can offer the most transportation choices, especially retrofitting suburbia with trains and rail transit, will be the most sustainable and economically viable. China gets this, which is why it is in a crash program including subways and high-speed rail that America is still not building. The suburban retrofit has gotten little attention, but it’s vital, would also create new jobs, and is actually doable on portions of the East Side. We should be moving with a sense of urgency on I-90 and 520.

McGinn will probably lose. The process-is-everything ethos here can drag on for years until it can’t, and now “everybody” is ready to go, whatever the wisdom of continuing dependency on single-occupancy car trips. It’s funny that Seattle claims green cred yet always looks enviously at Portland, which continues to build light-rail, including a new bridge totally dedicated to transit. In reality, our metro area wants that pony — to be green, but still keep building a 1965 transportation system. But the 1965 energy world is not coming back, no matter what we want. No matter, even, what Microsoft wants.


Comments | More in Housing, Sustainability, Transportation, Urban issues

March 29, 2010 at 9:55 AM

The China syndrome: More on instability, unsustainable relations and who’s to blame

Sunday’s column on China’s threat to global stability generated a large number of comments and emails, pro and con (and this aside from the usual trolls). I don’t disagree that America, too, is a danger, with our Ponzi-scheme economy, financial swindles, endless borrowing, perfidious executives and military adventures. But no major player in the world economy operates with China’s special set of protectionism, lack of transparency and authoritarianism. Maybe, as a few suggested, this will be the model that triumphs. Maybe it, too, is unsustainable.

The Economic Policy Institute, which is backed by organized labor but consistently puts out solid stuff, has a new report on American jobs lost as a result of China’s peculiar trade policies. It digs deep into unemployment data, down to congressional districts. At least 2.4 million jobs have been lost or displaced, and wages have been driven lower, since China entered the WTO. California and Texas have been hardest hit, but every state has seen negative effects.

As with NAFTA, China’s entry into the World Trade Organization was sold, by President Clinton, pro-trade Democrats and Republicans, as something that would create more net jobs here. The reality is that trade creates winners and losers, and in a world of surplus labor and one big player operating by its own rules, the losers among Americans are growing. This is not “anti-China” or “pro-China.” It merely is. The biggest problem is we don’t want to talk about it.


Comments | More in Sustainability, Trade

March 25, 2010 at 9:55 AM

China jumps out to big lead in renewable energy; Why JPMorgan thinks you’re without a job

Who’s winning the race to build a clean-energy economy? Hu is. Sorry — couldn’t resist. According to a new report by the Pew Charitable Trusts, China leads G-20 nations in such investments, with $34.6 billion, nearly twice that of the United States.

This should be no surprise to Sound Economy readers. China is building a vast high-speed train network while America has yet to build one, and the one we’re seeding is in suburbanized, car-centric, car-values Florida, with no transit connections or provision for Zip cars or the like at the stations. China is trying to corner research and manufacturing in renewable energy to become the OPEC of the 21st century. It is also trying to gain prime access to the raw materials that will power the new energy economy.

China understands that all this will be a huge strategic advantage in a world facing peak oil (where half if this one-time gift of geology has been burned up and the remainder is harder to get and being consumed at a much faster rate) and the costs of climate change. Do we understand?

You can download the full report here.


Comments | More in Energy, Sustainability, Washington Mutual

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